New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

George E. Pataki
Governor

Gregory V. Serio
Superintendent

The Office of General Counsel issued the following informal opinion on November 19, 2004, representing the position of the New York State Insurance Department.

Re: Non-Sub-Licensee Agents and Brokers

QUESTIONS PRESENTED:

1. May an individual who is not a member of a firm that is licensed as an insurance agent or broker be a sub-licensee of the firm?

2. May an agent or broker who is not a sub-licensee of a firm that is licensed as an insurance agent or broker solicit business for the firm?

CONCLUSIONS:

1. No. Pursuant to N.Y. Ins. Law § 2103(c) (McKinney 2000), as amended by Chapter 687 of the Laws of New York 2003, and N.Y. Ins. Law § 2104(b)(2) (McKinney 2000), as amended by Chapter 687 of the Laws of New York 2003, only members of a firm are permitted to be sub-licensees of the firm.

2. No, except as provided in N.Y. Ins. Law § 2101 (McKinney 2000), as amended by Chapter 687 of the Laws of New York 2003. N.Y Comp. Codes R. & Regs. Tit. 11 § 34.3 (Regulation 125) states "No person other than a sublicensee, licensed partner or supervising person may solicit business or otherwise act as an agent or broker in the name of any other agent or broker except as specified in section 2101 of the Insurance Law."

FACTS:

The inquiry was general in nature.

ANALYSIS:

1. Only Members of a Firm Are Permitted To Be Sub-Licensees of the Firm.

Insurance agents are licensed pursuant to N.Y. Ins. Law § 2103 (McKinney 2000), as amended by Chapter 687 of the Laws of New York 2003, which provides in pertinent part:

(c) Any such license issued to a firm or association shall authorize only the members thereof, named in such license as sub-licensees, to act individually as agents thereunder, and any such license issued to a corporation shall authorize only the officers and directors thereof, named in such license as sub-licensees, to act individually as agents thereunder. Every sub-licensee, acting as insurance agent pursuant to such a license shall be authorized to do so only in the name of the licensee. (emphasis added).

Insurance brokers are licensed pursuant to N.Y. Ins. Law § 2104 (McKinney 2000), as amended by Chapter 687 of the Laws of New York 2003, which provides in pertinent part:

(b)(2) A license issued to a corporation may name as sub-licensees only the officers and directors of such corporation, and a license issued to a firm or association may name as sub-licensees only the individual members of such firm or association. Each sub-licensee named in such license must be qualified to obtain a license as an insurance broker, and for each such sub-licensee a fee must be paid at the times and at the rates hereinafter specified. (emphasis added).

Pursuant to N.Y. Ins. Law § 2103(c), only members of a firm that is licensed as an insurance agent can be sub-licensees of the firm and, pursuant to N.Y. Ins. Law § 2104(b)(2) only members of a firm that is licensed as an insurance broker can be sub-licensees of the firm. Accordingly, agents or brokers who are not members of the firm may not be included as sub-licensees on the firm’s license.

2. No Person Other Than a Sub-Licensee, Licensed Partner or Designated Supervising Person May Solicit Business for a Firm.

N.Y Comp. Codes R. & Regs. Tit. 11 § 34.3 (Regulation 125) provides:

No person other than a sublicensee, licensed partner or supervising person may solicit business or otherwise act as an agent or broker in the name of any other agent or broker except as specified in section 2101 of the Insurance Law.

N.Y Comp. Codes R. & Regs. Tit. 11 § 34.1(f) (Regulation 125) provides:

Supervising person means any natural person who is a licensed agent or broker and who has been deemed or designated to be responsible for and in charge of a headquarters location or satellite office.

N.Y. Ins. Law § 2129(a) (McKinney 2000) provides:

Each place of business established by the holder of an agent and/or broker license shall be under the supervision of one or more persons licensed to do the kinds of business transacted in the office. The headquarters location must be supervised by one or more persons licensed to do all the kinds of business for which the licensee is authorized. Any satellite office established by a licensee must be supervised by one or more persons licensed to do the kinds of business to be transacted in that office.

Only the firm’s sub-licensees, licensed partners or designated supervising persons may solicit business for the firm or act as agents or brokers in the name of the firm. N.Y Comp. Codes R. & Regs. Tit. 11 § § 34.3, 34.1(f) (Regulation 125). N.Y. Ins. Law § 2101 (McKinney 2000) contains certain narrowly drawn exceptions to this rule.

Please note that designated supervising persons must be appointed in accordance with N.Y Comp. Codes R. & Regs. Tit. 11 § 34.2 (Regulation 125). Additionally, the notice requirements set forth within N.Y Comp. Codes R. & Regs. Tit. 11 § 34.4 (Regulation 125) must be complied with.

For further information you may contact Paul A. Zuckerman Supervising Attorney at the New York City Office.